Forex Trading Options in Bulgaria with BFSC

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Bulgaria is a Southeastern European country that received its EU membership back in 2007. All EU members come under the European Economic Area (EEA) agreement that binds together all EU member nations for continued growth and development of the European economy through free trade pacts and collaboration on other financial aspects. Companies incorporated in the EU are free to carry out their businesses anywhere in the EU without setting up a local representation in individual countries. BFSC Forex brokers are also allowed to cater to all countries in the EU under the EEA agreement, which is one of the significant advantages for companies that are willing to set up a Forex brokerage in Bulgaria.

The Bulgarian Financial Supervision Commission (BFSC) is an independent regulatory agency that reports directly to the National Assembly of the Republic of Bulgaria. The BFSC was founded in 2003, years before the country was inducted into the EU. The BFSC was modified through the intervention of the officials of the EU to conform the regulatory standards according to the MiFID derivative. BFSC regulated brokers are regulated according to the strict guidelines issued by the MiFID, making it one of the most respected regulatory agencies in Europe. Bulgarian FSC is not only responsible for regulating Forex brokers, but is also assigned the duty of regulating and licensing all non-banking financial institutions that include firms operating in the capital market, insurance sector, pension schemes, and other online as well as e-payment gateways.

Bulgaria is proving to be a highly popular destination for Forex brokers due to the low operating costs and an incredibly low tax structure. All corporate taxes in Bulgaria are levied at 10% flat, which provides a fantastic opportunity for Forex brokers to set up their business in a low-cost environment for improving their bottom line. It is also relatively cheaper to incorporate a business in Bulgaria, and the average salaries for talented professionals as well as the cost of living are considered to be among the lowest in Europe. Bulgaria has received top ranking in the human development index as of recent past, and together with an inexpensive living environment, Bulgarian Forex brokers are quickly demonstrating an immense potential for becoming one of the leading countries for Forex brokerage services and allied products.

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What Are The BFSC Regulations On Forex Brokers?

BFSC has less strenuous regulatory guidelines when compared to the overall difficulty of gaining a European regulatory license from other regulatory agencies. Even though the BFSC is designed according to the MiFID derivative, the Bulgarian Government has made it easier for Forex brokers to set up a brokerage in the country with lower regulatory guidelines and a cost-efficient financial system. BFSC license fees and other set up expenses are highly reasonable and are only a fraction of the cost incurred in other established countries such as Cyprus.

Along with a lower tax structure, Bulgaria allows Forex brokers to set up their business with a small minimum paid up capital of 50,000 Euros, which is significantly less than other jurisdictions. Cyprus, on the other hand, stipulates a minimum of 1 million Euros, which prevents many small-scale brokers from setting up a brokerage in the country. The minimum paid up capital for Forex brokers in Bulgaria depends on the transactions and volumes, but small to intermediary brokerage houses can set up their brokerages with anywhere between 50,000 to 125,000 Euros as minimum paid up capital. Since Bulgaria is a part of the EEA and under the MiFID derivative, BFSC regulated brokers are required to adhere to several standard regulatory protocols that are devised according to the standard EU legal framework of operations created for financial firms.

Bulgarian Forex brokers are routinely audited for preventing any misrepresentation of financial statements, and every regulated broker should hold their client funds in segregated bank accounts at the top banks in Europe. Brokers are only allowed to access client funds for meeting their traders’ open positions in the market, and BFSC regulated brokers should provide a track of all financial transitions to the BFSC to ensure that the broker is indeed operating based on the guidelines issued to them by the regulatory authorities. BFSC has the authority to issue sanctions and slap penalties against financial companies that do not follow the BFSC code of conduct.

While the BFSC is required to be strict against its member nations, the BFSC is known to have a soft approach to regulating its member firms. The very fact that BFSC allowed brokers to operate in the country with a relaxed regulatory oversight has helped brokers to enjoy better freedom while basing their brokerage in Bulgaria.

Does The BFSC’s Regulatory Guidelines Affect The Safety Of My Funds?

BFSC might have the bare minimum regulatory protocols that are required to satisfy the MiFID derivatives; however, that does not mean that Bulgaria is a country to be taken lightly. The MiFID derivatives are created to protect an investor against financial abuse and broker scams and are considered to be among the highest in global regulatory standards. Therefore, it is difficult for BFSC Forex brokers to indulge in scam practices or carry out fraudulent activities without receiving severe sanctions or reprimands or sometimes in extreme cases, lose their licenses for life. Therefore, investing your funds into BFSC regulated brokers should protect your funds against any misuse.

The MiFID has an excellent customer complaint resolution process, which is adopted by BFSC Forex brokers in Bulgaria to address investor complaints and to eradicate any occurrences of broker scams. BFSC is active in its involvement with various international regulatory organizations and other agencies to ensure that they have a significant exposure to the global markets for collaboration on a broad range of financial and legal issues in the international financial market. As an active member of various international organizations such as the International Organization of Securities Commissions (IOSO), the International Association of Insurance Supervisors (IAIS), the International Organization of Pension Supervisors (IOPS), and the Francophone Institute for Financial Regulation, the BFSC aims to become an established EU regulatory agency and a powerhouse for financial companies on the European continent.

Bulgarian Forex Brokers & The Future Of FX Trading In Bulgaria

BFSC Forex brokers continue to gain significant popularity, and if all economic factors remain the same, Bulgaria can become of the most popular investment destinations for Forex brokers from around the world. Being an EU country with direct access to all EU member nations under the EEA and the MiFID derivative, Bulgaria does seem to be an excellent economy for brokers that wish to enjoy significant tax breaks and a low-cost regulatory environment to set up their brokerage.

Bulgaria does not have any policies or trading rules that limit the freedom for Forex traders, which is considered to be another advantage for investors that seek to have full control over their Forex trading strategies. BFSC continues to attract several mainstream Forex brokers, and if the current trend prevails, Forex brokers in Bulgaria are bound to become a prominent fixture in the retail trading market. Some traders might prefer brokers from other regulatory agencies such as the NFA (US) and the FCA (UK) for their harsh regulatory guidelines, but BFSC regulated broker should be able to provide an adequate regulatory protection for investors due to its affiliation with the EU.

As a trader, you will find that most of the brokers under the MiFID derivative are committed to the best in customer service due to the serious legal consequences imposed on firms if they do not conform to the guidelines on a consistent basis.

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